SBC Workers Begin Planned Four-Day Strike
Health Costs, Outsourcing At Center of Labor Dispute
By Christopher Stern
Washington Post Staff Writer
Friday, May 21, 2004; Page E02
More than 100,000 SBC Communications Inc. workers began a scheduled four-day strike this morning to protest company moves to outsource jobs and shift more of the burden for health care costs onto them.
Members of the Communications Workers of America had been working without a contract at the nation's second-largest regional phone company since April 3. Talks broke down this week.
The union is resisting a proposed increase in medical co-payments and wants unionized workers to get opportunities in Internet-related services, which SBC has been subcontracting to other companies.
SBC has customers in 13 states, covering about one-third of the U.S. population, but the company does not have a presence in the Washington area. The strike is most likely to affect customers seeking to get lines installed or trying to order new services. The company said regular phone service is not likely to be affected.
Last September, the CWA made similar demands in negotiations with Verizon Communications Inc. The CWA threatened a strike, but an agreement was reached without a work stoppage. Talks with BellSouth Corp. are scheduled to begin later this summer.
The tension between the local telephone giants and their labor force reflects the heightened competition in the industry. For the first time in the 100-year history of the business, the major telephone companies are enduring a decline in the total number of telephones served.
The CWA, acknowledging the shifting industry dynamics, said the call for a limited strike was an effort to call attention to the issues without causing the company significant harm.
"The industry is very competitive. It is very likely that in a prolonged strike they would start losing major customers. We do not want to damage the company," CWA spokesman Jeff Miller said.
During the past three years, San Antonio-based SBC has lost 10 million lines. It now serves 55 million.
The company says it has trimmed about 24,000 jobs during that period; CWA claims that number is closer to 29,000. SBC's total workforce is 170,000.
The decline in local phone lines results from increased competition from wireless companies and long-distance companies such as AT&T Corp. and MCI Inc. that have entered the local telephone business.
SBC officials said yesterday that they had been preparing for a strike for a year. "We plan for hurricanes, we plan for tornados, we plan for everything," said SBC spokesman Walt Sharp.
The company lined up managers, retirees and vendors to take the place of workers who leave their jobs.
In addition to its traditional telephone business, SBC is a major provider of long-distance service, with approximately 14 million customers. SBC and BellSouth jointly own Cingular Wireless, the Atlanta-based mobile phone company.
Sharp said the latest offer by the company calls for a 5 percentage-point increase in medical co-payments. The increase would bring the co-payment up to 10 percent of the total cost, he said.
"We are not asking for a penny in terms of monthly contribution," Sharp said.
SBC will spend an average of $9,500 per employee on health care costs in 2005, Sharp said. Last year, it spent an average of $8,000 per employee.
As for the CWA desire to limit outsourcing, the company said it was not opposed to having unionized employees work on Internet-related projects as long as they did so at competitive rates.
© 2004 The Washington Post Company